Agro Perspectiva

FAO Food Price index declined in January 2025, mostly due to lower sugar, vegetable oil and meat prices

08.02.2025 18:00 "Agro Perspectiva" (Kyiv) — The FAO Food Price Index* (FFPI) averaged 124.9 points in January 2025, down 2.1 points (1.6 percent) from its revised December level. Decreases in the price indices for sugar, vegetable oils and meat more than offset increases in those for dairy products and cereals. The overall index was 7.3 points (6.2 percent) higher than its corresponding level one year ago, however, it remained 35.3 points (22.0 percent) below the peak reached in March 2022.

The FAO Cereal Price Index averaged 111.7 points in January, up 0.3 points (0.3 percent) from December but still 8.2 points (6.9 percent) below its year-earlier level. Wheat export prices dropped very slightly in January, with little movements during the month. While weak import demand, leading to slow export sales from several major exporters, weighed on prices, tighter supplies in the Russian Federation and mixed winter crop conditions in parts of the European Union, the Russian Federation and the United States of America provided support. World maize prices increased in January, surpassing their one-year-earlier levels for the first time in two years. Upward price pressure stemmed from seasonally tight supplies, unfavourable conditions in Argentina as planting finished, slow progress in Brazil’s main crop (safrinha), along with revised, lower maize production and stock forecasts in the United States of America. Among other coarse grains, world prices of sorghum and barley increased, although the rise for barley was only marginal. Meanwhile, the FAO All Rice Price Index declined by 4.7 percent in January, as ample exportable supplies and competition among exporters continued to exert downward pressure on prices.

The FAO Vegetable Oil Price Index averaged 153.0 points in January, down 9.1 points (5.6 percent) from the previous month, yet it remained 24.9 percent above its level a year ago. The decline was mainly driven by lower world palm and rapeseed oil prices, while soy and sunflower oil quotations remained stable. After rising for seven consecutive months, international palm oil prices declined from multi-year highs, largely due to demand rationing, while rapeseed oil prices contracted moderately in early 2025. By contrast, soy and sunflower oil quotations stayed steady; they were supported, respectively, by concerns over unfavourable weather in parts of South American soybean-producing countries and robust global import demand.

The FAO Meat Price Index averaged 117.7 points in January, down 1.7 points (1.4 percent) from December, while remaining 8.9 points (8.1 percent) above its level a year ago. The decline was driven by lower international ovine, pig and poultry meat prices, which outweighed increases in bovine meat quotations. Ovine meat prices eased as demand decreased after the end-of-year holidays. Similarly, pig meat prices declined, due to lower quotations in the European Union, where an outbreak of foot-and-mouth disease in Germany triggered import bans by several key-importing countries, resulting in abundant surplus supplies, exacerbated by backlogs stemming from abattoir closedowns during the winter holidays. Meanwhile, poultry meat prices softened, reflecting ample supplies, particularly from Brazil, where competitive feed prices supported production. By contrast, world bovine meat prices rose, underpinned by sustained strong import demand from key markets.

The FAO Dairy Price Index stood at 142.9 points in January, up 3.3 points (2.4 percent) from December 2024 and as much as 24.3 points (20.4 percent) higher than its value a year ago. International quotations for cheese increased the most (7.6 percent month-to-month), reflecting rising global import demand amid a slowly recovering production and strong domestic retail sales in major producing countries. By contrast, international prices of butter continued to decline, despite increasing demand from food processors in Europe and Oceania. International prices of both skim and whole milk powders also declined, as a result of production recovery in Europe and sluggish domestic and import demand.

The FAO Sugar Price Index averaged 111.2 points in January, down 8.1 points (6.8 percent) from December and as much as 25.2 points (18.5 percent) from its value a year ago, reaching its lowest level since October 2022, when it averaged 108.6 points. The decline in January was mainly driven by improved global supply prospects for the ongoing 2024/25 season, following generally favourable weather in Brazil in recent months that benefited the sugarcane crops to be harvested from April 2025. Additionally, the decision by the Government of India to resume sugar exports after limiting them since October 2023 exerted further downward pressure on world sugar prices.